Earlier this month, the U.S. Treasury Department banned Americans from using of Tornado Cash, citing national security concerns as the agency claims the protocol has been used to launder $7 billion worth of crypto assets since 2019.
In a new interview with Bloomberg, the head of the crypto exchange says that there are still a lot of people who use Tornado Cash for legitimate reasons but to comply with the government order, Kraken will have to freeze funds that come from the crypto tumbler.
“We would prohibit withdrawals to any addresses associated with Tornado, and we would likely freeze any funds coming in from our Tornado address.”
Powell says that the case of Tornado Cash will likely be challenged for its validity.
“I think we’ll see a constitutional challenge against Tornado Cash, and I hope that people get their right to publish code and that code turns out to be speech and money turns out to be speech and everyone has a right to spend their money however they want.”
The Kraken executive also shares his thoughts on the restrictions that the government imposes on crypto.
“It’s a tough challenge now. It’s why we have these conversations going on all the time. We are really trying to educate regulators and law enforcement and the lawmakers about the real risks here and about the real need for financial privacy and who cryptocurrency really serves.
Beyond that, this speculative use case here in the United States, it’s really helping people all over the world who have less access to financial services. There are billions of people in the world that don’t have access to a bank account so crypto is really for those people first and foremost.
Getting around government controls around the monetary system is a sort of secondary benefit that you see come into play in cases like Canada where they’ve shut down the bank accounts of protesters. That’s the kind of scary thing we hope you don’t see here in the United States, but that’s another kind of insurance policy that cryptocurrency and Bitcoin specifically provides.”